Cost, risk, and return. These are the criteria most people apply to investment decisions, so why not apply them to information technology (IT) investments as well?

Several federal agencies are doing just that, thanks to I-TIPS, which stands for Information Technology Investment Portfolio System. Using state-of-the-art, Web-based, decision-support tools, Booz Allen developed I-TIPS to help federal clients make better IT investments.

I-TIPS makes it possible to assess IT investments on the basis of what they will achieve, the cost involved, and their chances for success. Using I-TIPS, managers can create profiles of proposed IT projects, with summaries of schedules and deliverables. Then chief information officers and other senior decision-makers can assess their entire portfolio of IT proposals and determine which are the best investments for their limited IT dollars.

'I-TIPS brings the people who manage the projects and the people who make the investment decisions together,' says Michael Farber, a Senior Associate at Booz Allen and the thought leader of I-TIPS. 'All the data is there. I-TIPS lets you select the investment that best meets your needs.'

Recently, for example, I-TIPS helped officials at the Office of Housing and Urban Development (HUD) decide which of $600 million in IT proposals should be funded. Because HUD's budget allowed for only about half that expenditure, the Department used I-TIPS to score, rank, and select the portfolio with the highest value for the organization.

Tracking Projects in Progress

Once a project is under way, I-TIPS enables IT managers to track how the work is progressing; to determine if it is on schedule, on budget, and accomplishing what it was intended to do; and to identify and monitor corrective actions.

'I-TIPS allows project managers to establish a technical baseline, and anytime it gets changed, the system can trigger a review. This can help prevent scope creep,' Farber says. And I-TIPS is useful in evaluating how well a project was executed by monitoring performance against baseline measures and estimates.

The system, which can be customized according to the needs of the user, also incorporates push technologies to signal new developments, such as when a project is approaching a budget overrun. I-TIPS can notify project managers and other IT investment managers by email when a project is over planned cost estimates or is running late.

More Than a Technology

I-TIPS is more than a new technology. It is part of an approach to smarter IT decision making that Booz Allen has developed to assist federal agencies, whose information officers are under congressional mandate to spend their IT dollars wisely.

Federal agencies can spend as much as 10 percent of their budget on IT. Yet, executives in both the private and public sectors don't always make IT decisions on the basis of data about cost, risk, and return. I-TIPS, which is modeled on financial investment tools, represents a new way of understanding information technology, one that applies discipline, metrics, and analysis to IT expenditures.

'But I-TIPS cannot do it all,' Farber warns. 'You have to put the right business processes in place.'

story posted March 2000